ACLU to sue Morgan Stanley over mortgage loans

Rubbie McCoy, a named plaintiff in a pending lawsuit against Morgan Stanley, said she had little hope of saving her Detroit home. (The New York Times)

MOBILE, Alabama - The American Civil Liberties Union, according to the New York Times, is accusing Morgan Stanley of fueling the production of risky and expensive loans that targeted African-American borrowers.

The ACLU lawsuit, expected to be filed on Monday by The Times, claims that Morgan Stanley is culpable for predatory loans made through the New Century Financial Corporation because the investment bank lent billions of dollars to New Century, a now-defunct subprime lender, and pressured it to make troublesome loans to African-American borrowers who could not afford them.